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Chuks Udo Okonta
The outgoing Group Managing Director/CEO of Continental Reinsurance, Dr Femi Oyetunji, has canvassed the need to reduce the number of Insurance companies to enable the underwriting sector thrive.
Dr. Oyetunji said this in an interview with Thisday Newspaper, stressing that: “If we don’t reduce the number of insurance companies in this market, we are not going anywhere. My personal belief is that 15 to 20 well-capitalised, skilled insurance companies will transform the industry.
According to him, he would like to see insurance companies talking to each other, looking for synergy, and saying, let us come together.
He said the biggest threat at the moment is that global players with big capital and all that it takes to drive growth are here and taking a position and that at the end of the day, they will take away the expected benefits.
“We can clearly see the danger, having seen the trend. Why we have not seen many of them at the moment is because of the economic situation. Once the situation improves, the big players from America and Europe will come in and dominate, and that is where the benefits will go. If the global players are based in the US, UK, or Germany, they will take the benefits to those places.
“What I will like to see is consolidation, having fewer insurance companies that have the requisite skills, the analytics, the technology and the products that people want. That is what will move us from the current less than one per cent penetration to at least double of that size at first, then we can get to five per cent, 10 per cent and more. Imagine the kind of industry we will have when the penetration gets to five percent!” he posited.
According to him, there is a need for reinsurers and more big players, stressing that the reason people go outside to place their risks is that insurance operators have exhausted what they have domestically.
“There is the local content law that we should take advantage of, but because the capacity is not there, we go outside, and we cannot overexpose our balance sheet to a single risk.
“There is a limit to what we can take. The recent licensing of a new reinsurance company by the National Insurance Commission (NAICOM) is a welcome development,” he added.
He expressed belief that operators should keep Nigerian premium within Nigeria and African premium within Africa, adding that premium retained could be used to build hospitals, roads, and other infrastructures and technology within the societies.
According to him, nobody will bring dollars from the United States to build schools or roads for us, hence, we should keep what we have within the economy.